Global insurance companies are expected to up their provision of commercial real estate (CRE) loans in the UK by £28.1bn over the next 5 years, according to a study out today from DLA Piper called Searching for Investment: Insurers as Lenders.
Since the financial crisis, the availability and character of lending to the UK’s CRE market has changed dramatically.
Bank financing has been much more difficult to obtain and, when it's available, the terms are heavily stacked in favour of the lender.
Although banks remain the majority providers of debt finance, what the report describes as their “effective withdrawal from new lending” has left a gap in funding across all sectors, but especially within CRE.
Insurance companies (life & pensions and annuity providers) could therefore provide a welcome boost to the beleaguered sector.